Soleno Therapeutics, Inc. (Soleno) (NASDAQ: SLNO), a clinical-stage
biopharmaceutical company developing novel therapeutics for the
treatment of rare diseases, today provided a corporate update and
reported financial results for the third quarter ended September
30, 2023.
Third Quarter 2023 and Recent Corporate
Highlights
- Announced positive statistically
significant top-line data from the randomized withdrawal period of
Study C602, a long-term treatment study of DCCR (Diazoxide Choline)
Extended-Release tablets for the treatment of Prader-Willi syndrome
(PWS).
- The study met its primary endpoint,
demonstrating a highly statistically significant difference in
change from baseline in HQ-CT total score for DCCR compared to
placebo (p=0.0022)
- Secondary endpoints of Clinical
Global Impression of Severity (CGI-S) and Clinical Global
Impression of Improvement (CGI-I) both showed strong trends towards
worsening in the placebo group compared to DCCR (p=0.08 and 0.09),
respectively.
- DCCR continued to be generally
well-tolerated in the randomized withdrawal period with no new or
unexpected safety signals, including no serious adverse events or
discontinuations due to adverse events occurring in any
participants in the treatment group.
- Presented results from the
randomized withdrawal phase of Study C602 at the Foundation for
Prader-Willi Research (FPWR) 2023 Research Symposium held on
October 5-6, 2023 in Denver, Colorado.
- Closed on gross proceeds of
approximately $129 million from an underwritten public offering of
common stock and concurrent private placement of common stock and
pre-funded warrants in October 2023.
- Appointed industry veteran Matthew
Pauls, J.D., M.B.A. to the Board of Directors. Mr.
Pauls currently serves as Chair of the Board of Directors and
Chief Executive Officer of Savara, Inc., a biopharmaceutical
company focused on rare respiratory diseases. He is also a member
of the Board of Directors at Amplo Biotechnology, a private gene
therapy company focused on rare neuromuscular disorders.
Previously, he was President and Chief Executive Officer and a
member of the Board of Directors at Strongbridge Biopharma
plc. In addition, Mr. Pauls has significant experience in
global commercial roles, including at Insmed, Shire
Pharmaceuticals, Bristol-Myers Squibb and Johnson &
Johnson.
- Hired Mike Huang, M.D. as Senior
Vice President of Clinical Development. Prior to joining Soleno,
Dr. Huang held leadership roles at several biopharmaceutical
companies, including AmMax Bio, Spruce Biosciences, Regulus
Therapeutics, Auspex Pharmaceuticals and Santarus, where he worked
on programs advancing small molecules, biologic agents and
oligonucleotide therapies through all phases of clinical
development and successful marketing authorizations. Dr. Huang’s
therapeutic experience spans an array of indications, including
rare/orphan diseases, endocrinology, neurology and
oncology.
“The recent announcement of positive results from the randomized
withdrawal phase of Study C602 was a significant milestone for us,”
said Anish Bhatnagar, M.D., Chief Executive Officer of Soleno
Therapeutics. “We are continuing our ongoing work preparing a New
Drug Application (NDA) submission to the U.S. Food and Drug
Administration (FDA), currently planned for mid-2024. Importantly,
following our successfully completed public offering and concurrent
private placement, we have initiated commercial readiness
activities and are well-capitalized to execute on our planned
corporate strategy leading up to and beyond potential approval of
DCCR for PWS.”
Financial Results
Soleno’s current research and development efforts are primarily
focused on advancing its lead product candidate, DCCR, for the
treatment of PWS, through late-stage clinical development.
Third Quarter 2023 Financial Results
As of September 30, 2023, Soleno had cash and cash equivalents
of approximately $52.4 million, which includes $8.4 million
received from exercised warrants issued as part of the Company’s
March 2022 public offering, and $15 million received from the
exercise of previously issued Tranche A warrants in connection with
Soleno’s December 2022 Securities Purchase Agreement which were
triggered by the announcement of positive top-line data. In
addition, $16.0 million of the $129 million public and concurrent
private financing was received in September 2023.The remaining
proceeds were received upon the closing of the transaction in
October 2023, together with an additional $17.5 million from
exercised Tranche B warrants in connection with the December 2022
Securities Purchase Agreement. In aggregate, the Company received
$169.9 million in gross proceeds from these financing
activities.
Research and development expenses for the three and nine months
ended September 30, 2023, were $6.0 million and $16.5 million,
compared to $3.8 million and $11.5 million for the same periods of
2022. Soleno’s research and development expenditures fluctuate
depending upon the state of its clinical programs and the timing of
CMC costs and other projects necessary to support the submission of
an NDA.
General and administrative expenses for the three and nine
months ended September 30, 2023, were $3.3 million and $9.3
million, compared to $2.3 million and $7.4 million for the same
periods of 2022. The increase was mainly attributable to an
increase in stock-based compensation and professional services
expenses.
Soleno is obligated to make cash payments of up to a maximum of
$21.2 million to the former Essentialis stockholders upon the
achievement of certain commercial milestones associated with the
future sales of DCCR in accordance with the terms of Soleno’s
merger agreement with Essentialis. The fair value of the liability
for the contingent consideration payable by us achieving two
commercial sales milestones of $100 million and $200 million in
revenue in future years was estimated to be $10.5 million as of
September 30, 2023, a $1.1 million increase from the estimate as of
June 30, 2023.
Total other expense was $0.5 million and $0.2 million in the
three and nine months ended September 30, 2023, compared to other
income of $0.1 million and $0.2 million for the same periods of
2022. The decrease was primarily due to the change in fair value of
warrants liabilities, partially offset by an increase in interest
income during the three and nine months ended September 30, 2023
compared to the three and nine months ended September 30, 2022.
Net loss for the three and nine months ended September 30, 2023,
was $10.9 million and $27.7 million, or a net loss of $0.95 and
$2.65 per basic and diluted share, compared to $6.1 million and
$18.6 million, or $0.65 and $2.31 per basic and diluted share, for
the same periods in 2022.
The following table summarizes the Soleno’s outstanding common
stock and common stock warrants as of October 31, 2023:
|
|
As of October 31, 2023 |
|
|
|
Number ofCommon Shares |
|
|
WeightedAverage ExercisePrice per Shares |
|
Common stock outstanding |
|
|
30,499,352 |
|
|
$ |
- |
|
Common stock warrants |
|
|
7,904 |
|
|
$ |
388.94 |
|
2018 PIPE warrants |
|
|
34,241 |
|
|
$ |
30.00 |
|
March 2022 common warrants |
|
|
2,122,924 |
|
|
$ |
4.50 |
|
March 2022 Pre-funded
warrants |
|
|
0 |
|
|
$ |
0.15 |
|
May 2023 Tranche A warrants |
|
|
0 |
|
|
$ |
1.75 |
|
May 2023 Tranche A Pre-funded
warrants |
|
|
3,058,837 |
|
|
$ |
0.01 |
|
May 2023 Tranche B warrants |
|
|
7,000,000 |
|
|
$ |
2.50 |
|
May 2023 Tranche B Pre-funded
warrants |
|
|
451,632 |
|
|
$ |
0.01 |
|
Oct 2023 Pre-funded warrants |
|
|
1,125,019 |
|
|
$ |
0.01 |
|
Total |
|
|
44,299,909 |
|
|
|
|
|
|
|
|
|
|
|
About PWSThe Prader-Willi Syndrome Association
USA estimates that PWS occurs in one in every 15,000 live births.
The hallmark symptom of this disorder is hyperphagia, a chronic and
life-threatening feeling of intense, persistent hunger, food
pre-occupation, extreme drive to food seek and consume food that
severely diminish the quality of life for patients with PWS and
their families. Additional characteristics of PWS include
behavioral problems, cognitive disabilities, low muscle tone, short
stature (when not treated with growth hormone), the accumulation of
excess body fat, developmental delays, and incomplete sexual
development. Hyperphagia can lead to significant morbidities (e.g.,
obesity, diabetes, cardiovascular disease) and mortality (e.g.,
stomach rupture, choking, accidental death due to food seeking
behavior). In a global survey conducted by the Foundation for
Prader-Willi Research, 96.5% of respondents (parent and caregivers)
rated hyperphagia and 92.9% rated body composition as either the
most important or a very important symptom to be relieved by a new
medicine. There are currently no approved therapies to treat the
hyperphagia/appetite, metabolic, cognitive function, or behavioral
aspects of the disorder.
About DCCR (Diazoxide Choline) Extended-Release
TabletsDCCR is a novel, proprietary extended-release
dosage form containing the crystalline salt of diazoxide and is
administered once-daily. The parent molecule, diazoxide, has been
used for decades in thousands of patients in a few rare diseases in
neonates, infants, children and adults, but has not been approved
for use in PWS. Soleno conceived of and established extensive
patent protection on the therapeutic use of diazoxide, diazoxide
choline and DCCR in patients with PWS. The DCCR development program
is supported by data from five completed Phase 1 clinical studies
in healthy volunteers and three completed Phase 2 clinical studies,
one of which was in patients with PWS. In the PWS Phase 3 clinical
development program, DCCR showed promise in addressing hyperphagia,
the hallmark symptom of PWS, as well as several other symptoms such
as aggressive/destructive behaviors, fat mass and other metabolic
parameters. Diazoxide choline has received Orphan Drug Designation
for the treatment of PWS in the U.S. and E.U., and Fast Track
Designation in the U.S.
About Soleno Therapeutics, Inc.Soleno is
focused on the development and commercialization of novel
therapeutics for the treatment of rare diseases. The company’s lead
candidate, DCCR extended-release tablets, a once-daily oral tablet
for the treatment of PWS, recently completed its Phase 3
development program to support a planned NDA submission. For more
information, please visit www.soleno.life.
Forward-Looking StatementsThis press release
contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical facts contained in
this press release are forward-looking statements, including
statements regarding the timing of any regulatory process or
ultimate approvals and determining a path forward for DCCR for the
treatment of PWS. In some cases, you can identify forward-looking
statements by terms such as "may," "will," "should," "expect,"
"plan," "anticipate," "could," "intend," "target," "project,"
"contemplates," "believes," "estimates," "predicts," "potential" or
"continue" or the negative of these terms or other similar
expressions. These forward-looking statements speak only as of the
date of this press release and are subject to a number of risks,
uncertainties and assumptions, including the risks and
uncertainties associated with market conditions, as well as risks
and uncertainties inherent in Soleno’s business, including those
described in the company's prior press releases and in the periodic
reports it files with the SEC. The events and circumstances
reflected in the company's forward-looking statements may not be
achieved or occur and actual results could differ materially from
those projected in the forward-looking statements. Except as
required by applicable law, the company does not plan to publicly
update or revise any forward-looking statements contained herein,
whether as a result of any new information, future events, changed
circumstances or otherwise.
Corporate Contact:Brian RitchieLifeSci
Advisors, LLC212-915-2578
Soleno Therapeutics, Inc.
Condensed Consolidated Balance Sheets (In
thousands except share and per share data)
|
|
September 30,2023 |
|
|
December 31,2022 |
|
Assets |
|
(Unaudited) |
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
52,437 |
|
|
$ |
14,602 |
|
Prepaid expenses and other current assets |
|
|
1,222 |
|
|
|
1,045 |
|
Total current assets |
|
|
53,659 |
|
|
|
15,647 |
|
Long-term assets |
|
|
|
|
|
|
Property and equipment, net |
|
|
15 |
|
|
|
26 |
|
Operating lease right-of-use assets |
|
|
474 |
|
|
|
131 |
|
Intangible assets, net |
|
|
9,235 |
|
|
|
10,693 |
|
Other long-term assets |
|
|
165 |
|
|
|
- |
|
Total assets |
|
$ |
63,548 |
|
|
$ |
26,497 |
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
3,216 |
|
|
$ |
1,777 |
|
Accrued compensation |
|
|
1,498 |
|
|
|
1,675 |
|
Accrued clinical trial site costs |
|
|
3,237 |
|
|
|
3,222 |
|
Common stock purchase liability |
|
|
19,938 |
|
|
|
- |
|
Operating lease liabilities - current |
|
|
256 |
|
|
|
155 |
|
Other current liabilities |
|
|
848 |
|
|
|
484 |
|
Total current liabilities |
|
|
28,993 |
|
|
|
7,313 |
|
Long-term liabilities |
|
|
|
|
|
|
2018 PIPE Warrant liability |
|
|
653 |
|
|
|
1 |
|
Operating lease liabilities - noncurrent |
|
|
214 |
|
|
|
- |
|
Contingent liability for Essentialis purchase price |
|
|
10,468 |
|
|
|
8,835 |
|
Total liabilities |
|
|
40,328 |
|
|
|
16,149 |
|
Commitments and contingencies
(Note 6) |
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
Preferred stock, $0.001 par
value; 10,000,000 shares authorized, no shares issued and
outstanding |
|
|
- |
|
|
|
- |
|
Common stock, $0.001 par value,
100,000,000 shares authorized, 15,467,229 and 8,159,382 shares
issued and outstanding at September 30, 2023 and December 31, 2022,
respectively |
|
|
15 |
|
|
|
8 |
|
Additional paid-in-capital |
|
|
288,320 |
|
|
|
247,762 |
|
Accumulated deficit |
|
|
(265,114 |
) |
|
|
(237,422 |
) |
Accumulated other comprehensive
loss |
|
|
(1 |
) |
|
|
- |
|
Total stockholders’ equity |
|
|
23,220 |
|
|
|
10,348 |
|
Total liabilities and stockholders’ equity |
|
$ |
63,548 |
|
|
$ |
26,497 |
|
Soleno Therapeutics,
Inc.Condensed Consolidated Statements of
Operations and Comprehensive Loss
(unaudited)(In thousands except share and per
share data)
|
|
Three Months EndedSeptember
30, |
|
|
Nine Months EndedSeptember
30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
$ |
6,043 |
|
|
$ |
3,771 |
|
|
$ |
16,500 |
|
|
$ |
11,455 |
|
General and administrative |
|
|
3,318 |
|
|
|
2,332 |
|
|
|
9,341 |
|
|
|
7,442 |
|
Change in fair value of contingent consideration |
|
|
1,021 |
|
|
|
132 |
|
|
|
1,633 |
|
|
|
(110 |
) |
Total operating expenses |
|
|
10,382 |
|
|
|
6,235 |
|
|
|
27,474 |
|
|
|
18,787 |
|
Operating loss |
|
|
(10,382 |
) |
|
|
(6,235 |
) |
|
|
(27,474 |
) |
|
|
(18,787 |
) |
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value of warrants liabilities |
|
|
(653 |
) |
|
|
2 |
|
|
|
(652 |
) |
|
|
31 |
|
Interest income |
|
|
174 |
|
|
|
101 |
|
|
|
434 |
|
|
|
175 |
|
Total other income (expense), net |
|
|
(479 |
) |
|
|
103 |
|
|
|
(218 |
) |
|
|
206 |
|
Net loss |
|
$ |
(10,861 |
) |
|
$ |
(6,132 |
) |
|
$ |
(27,692 |
) |
|
$ |
(18,581 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
Total comprehensive loss |
|
$ |
(10,862 |
) |
|
$ |
(6,133 |
) |
|
$ |
(27,693 |
) |
|
$ |
(18,583 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share, basic
and diluted |
|
$ |
(0.95 |
) |
|
$ |
(0.65 |
) |
|
$ |
(2.65 |
) |
|
$ |
(2.31 |
) |
Weighted-average common shares
outstanding used to calculate basic and diluted net loss per common
share |
|
|
11,436,748 |
|
|
|
9,417,705 |
|
|
|
10,443,186 |
|
|
|
8,045,513 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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